Allowed

Ranjeet v. State of U.P. and Others

Allahabad HC21 Aug 2019WRIC/42911/2008

Case brief

AI extract

What is this about?

The High Court quashed an order cancelling the petitioner's fair price shop license. Although pending criminal cases existed, the Court held the cancellation order was unsustainable due to its failure to provide reasoned grounds and the absence of a full-fledged inquiry as mandated by law.

What did the court decide?

The order dated 31.07.2008 canceling the fair price shop license is quashed. The petitioner is entitled to continue running the shop as per the interim order.

Ranjeet Vs State of U.P. and Others — Contract and Commercial Disputes | Allahabad HC (2019)

AFR

Court No. - 1

Case :- WRIT - C No. - 42911 of 2008

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Petitioner :- Ranjeet Respondent :- State Of U.P. And Others Counsel for Petitioner :- A. Kumar Singh,Smt.D.Gupta Counsel for Respondent :- C.S.C.

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Hon'ble Ramesh Sinha,J. Hon'ble Ajit Kumar,J.

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Heard Sri A. Kumar Singh, learned counsel for the petitioner and Sri S.N. Shukla, learned Standing Counsel for the State respondents.

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By means of this writ petition under Article 226 of the Constitution of India, the petitioner has approached this Court for quashing the order dated 31.07.2008 by which the fair price shop license of the petitioner has been cancelled on the ground that there were two criminal cases pending against the petitioner bearing Case Crime No. 183 of 2008, under Sections 452/ 323, 504, 506 IPC and one Non-Cognizable Report (for short 'NCR') No. 98 of 2007, under Sections 323, 504, 506 IPC.

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Initially writ petition was entertained by a Division Bench of this Court vide order dated 21.08.2008 and this Court while noticing the argument of learned counsel for the petitioner that the offences that were though criminal in nature but were petty offences and should not have formed the basis of cancellation of fair price shop

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license, stayed the effect and operation of the impugned order 31.07.2008.

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Pursuant to the above interim order dated 21.08.2008 petitioner has been running the fair price shop till today.

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Briefly stated facts of the case are that the petitioner, who is having a fair price shop license validly granted by the authorities, was issued with a show cause notice dated 02.07.2008 served upon the petitioner on 17.07.2008 calling upon him to explain as to why the fair price shop license may not be cancelled on the ground that there were criminal cases registered against the petitioner. The emphasis was laid on clause 10 of the Government Order dated 17.08.2002 in which vide Clause (d) it is provided that the fair price shop license shall be given to a person against whom there should not be any criminal case registered.

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It is in this above factual background that the petitioner's fair price shop license was suspended also vide order dated 02.07.2008 and reply/ explanation was sought from the petitioner. In compliance of the notice issued, as above, to the petitioner, the petitioner submitted his detailed reply in which vide paragraph no. 5 he brought to the notice of the authorities that in connection with Case Crime No. 183 of 2008, under Sections 452/ 323, 504, 506 IPC, he had already filed a Criminal Misc. Writ Petition No. 1179 of 2008 in which

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interim order had been passed and which was already supplied to the police station concerned. He, therefore, submitted that unless and until he was declared guilty of the offences, he cannot be taken as convict and no penal action, therefore, should be taken against the petitioner.

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In so far as the NCR is concerned, it was brought to the notice of the higher authorities by the same reply that no further investigation had been conducted in connection with NCR no. 98 of 2007 under Sections 323, 504, 506 IPC and therefore, it could not be taken as a ground to cancel the license of the petitioner. The petitioner also submitted that in respect of the distribution of scheduled commodities and running of fair price shop, there was no complaint against the petitioner and therefore, the petitioner could not be held guilty of any violation of terms of agreement or contract pursuant to which he was running the fair price shop. Thus, it was pleaded that there was no occasion to cancel the fair price shop license of the petitioner.

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Having considered the reply of the petitioner, the authority has simply referred three facts that vide order dated 02.08.2008 the fair price shop license of the petitioner was suspended and he was required to submit explanation within a week; and that the notice was also published in news daily 'Amar Ujala' on 04.07.2008; the reply was submitted by the petitioner on 18.07.2008 which was duly examined but the answer was not found satisfactory; and therefore, in public interest, the fair

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price shop license of the petitioner was being cancelled.

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That argument advanced by learned counsel for the petitioner is two fold: firstly, the fair price shop license of the petitioner has been cancelled in respect of the charges in which the petitioner has not been found guilty till date and further that there was no charge of misappropriation of the scheduled commodities or malpractice nor, there was any complaint of overpricing that may be said to have resulted in violation of terms of agreement pursuant to which he was running the fair price shop; and secondly argument is that no prescribed procedure followed in cancelling the fair price shop license of the petitioner as no final inquiry was conducted in the matter. Besides above, yet another argument is that the order is basically non speaking and cryptic one as in one line the reply of the petitioner has been rejected holding it to be non satisfactory. He submits that the respondent was hide bound in law to consider the reply of the petitioner in correct prospective and should have recorded reasons as to why the reply of the petitioner was not satisfactory.

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Per contra , the learned counsel for the State respondents has submitted that once the criminal case has come to be registered against the petitioner and which is not disputed, the petitioner cannot claim any equity before this Court. It is submitted that the NCR was registered in the year 2007 at the time when the allotment of shop was done and therefore, the petitioner

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was definitely guilty of concealment of material facts and this Court should not interfere in exercise of powers under Article 226 of the Constitution of India in such matters.

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Having heard learned counsels for the parties and their arguments advanced across the Bar and having perused the records, we find that as far as the order passed by respondent cancelling the fair price shop license of the petitioner is concerned, it really lacks the qualities and essentials of an order which can be said to be a reasoned order. While it is true that a criminal case was referred to in the show cause notice and in connection therewith a reply was submitted finds reference in the order impugned but there is no discussion about the reply submitted by the petitioner so that it can be deciphered what were the reasons that have weighed the consideration of the respondent authorities in ultimately arriving at a conclusion to cancel the fair price shop license of the petitioner. Every administrative action and administrative inquiry should result in an order passed on reasons which should be indicative of due application of mind by the authority dealing with the matter and passing the order. No amount of pleadings raised in the counter affidavit can substitute the reasons which have not come to be recorded in the order impugned, to justify the order.

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12. In case of Rashmi Metaliks Limited and Another

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v. Kolkata Metropolitan Development Authority and

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Others, (2013) 10 SCC 95 , considering the aspect of judicial review in case of administrative action, the Apex Court held that if the reasons are not contained in the order, it is bad.

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Again in the case of T.P. Senkumar. IPS v. Union of India and Others, (2017) 6 SCC 801 , the Apex Court has held that an administrative order must be judged by reason mentioned therein and cannot supplemented by the reason through affidavit or otherwise in subsequent court proceedings.

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Further in the case of Mangalam Organics Ltd. v. Union of India (2017) 7 SCC 221 vide taking note of the limited scope of judicial review of administrative action, the Court did carve out an exception if an order is passed with /an extraneous purpose, upon extraneous consideration or arbitrary without applying its mind to the relevant consideration or were it is not guided by norms which are relevant to the object already achieved under Artice 14 of the Constitution.

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So in view of the above legal position, the order impugned cannot be sustained on this count alone and deserves to be quashed.

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however, we further proceed to examine the order from the point of view of the Essential Commodities (Distribution and Control) Order, 2004 (in short 'Control Order') and the Government Order framed in

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that regard. While it is true that a preliminary inquiry is held under the Control Order read with relevant Government Orders to form a prima facie opinion to suspend the shop but ultimately a full fledged inquiry is contemplated and unless and until a full fledged inquiry is held and report is submitted, the authorities are not justified in taking the ultimate decision on the basis of preliminary inquiry and reply submitted by the petitioner. In the Full Bench judgment of this Court in Puran Singh v. State of U.P. 2011 AIR 73 it has been held vide para 35 thus:

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"35.Powers of suspension is centrally there but while exercising care is to be taken to the mandate of the proviso which states that the order is to be speaking one. Thus so far the power of suspension while proceeding to call upon the licencee about cancellation of the shop is concerned it is always there. It will be incorrect to hold that without preliminary enquiry in respect to a fact finding and without any opportunity the shop is not to be suspended. Para 4 and 5 of the Government Order clearly permits fulfledged enquiry purusant to the show cause notice for cancellation and then final decision in the matter. So far the order of suspension is concerned Government Order do not provide any appeal and at the same time there was no contention of signing an agreement as was made obligatory pursuant to Distribution Order of 2004."

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So, in the present case it is factually correct that no no full fledged inquiry has been held and merely on the basis of reply of show cause notice, the authorities proceeded to cancel the fair price shop license of the petitioner and so, on this count also the impugned order deserves to be quashed.

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However, we further proceed to examine the legal position regarding non disclosure of certain facts as has been claimed in the show cause notice referring to clause 10 of the Government order dated 17.08.2002 in which vide sub-clause (d) it was necessary for an applicant to have disclosed the criminal case, if any registered.

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In the present case, we find the situation a bit different on facts. The fair price shop license was admittedly given to the petitioner in the year 2007, whereas, the criminal case is of the year 2008 bearing Case Crime No. 183 of 2008, under Sections 452/ 323, 504, 506 IPC and therefore, where cannot take it to be violation of any clause pursuant to which the petitioner was required to disclose factum of pending criminal case.

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In so far as registration of NCR against the petitioner is concerned, the petitioner submits that he was not aware of any such case as no investigation ever took place and so there was no occasion to make any disclosure in that regard. The question whether non disclosure of NCR would amount to violation of the conditions for grant of fair price shop license requires consideration in the present case. We consider that as far as the NCR is concerned it is not necessary that the petitioner might be aware of any such NCR registered against him and it has no where come either in the show cause notice, or in the final order passed by the authority that the petitioner had the knowledge of NCR

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registered on 17.07.2008 against him and yet he concealed this fact. It has also not come anywhere as to what is the exact date of grant of fair price shop license to the petitioner so that it cannot be examined and be verified as to whether the NCR dated 17.07.2008 was registered against the petitioner after the agreement or before, besides the fact that mere registration of an NCR also would not hold the petitioner guilty of offence complained of.

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In view of the above, writ petition succeeds and is allowed . The order dated 31.07.2008 passed by the Sub-Divisional Magistrate, Etah is quashed. The petitioner is running the fair price shop under the interim order of this Court dated 21.08.2008, shall continue to run the same as a consequence to this order and is entitled to lift the essential commodities as per the agreement reached with the respondents for running the fair price shop in question.

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Order Date :- 21.8.2019 IrfanUddin

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(Ajit Kumar,J.) (Ramesh Sinha,J.)

Ranjeet v. State of U.P. and Others

Case brief

What is this about?

What did the court decide?

Ranjeet v. State of U.P. and Others

Case brief

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